Background
Benjamin Charles Hinckfuss was previously found, by default judgment, to have provided tax agent services for a fee while unregistered on 11 occasions, provided a BAS service for a fee while unregistered once, and advertised tax agent services while unregistered. The conduct occurred in 2021 and 2022 and involved preparing and lodging clients’ income tax returns, amendments and BAS statements, often through clients’ personal myGov accounts.
The services generated $43,955.95 in fees or rewards. Mr Hinckfuss did not participate in the liability or penalty proceedings, provide evidence of his financial circumstances, or express remorse. He had also been penalised in 2013 for earlier contraventions of the same statutory regime.
The Court’s Holding
Justice Wheatley ordered Mr Hinckfuss to pay total civil penalties of $150,000 under the Tax Agent Services Act 2009 (Cth): $132,000 for the 11 unregistered tax agent service contraventions, $12,000 for the unregistered BAS service, and $6,000 for advertising unregistered tax agent services.
The Court held that the conduct was deliberate, serious and systematic, and had been structured to appear as if clients themselves had lodged the returns. Repeat offending, the substantial fees obtained, the absence of cooperation and the lack of evidence about capacity to pay supported a penalty directed to both specific and general deterrence. The Court also ordered Mr Hinckfuss to pay the Board’s costs, to be fixed by a Registrar.
Key Takeaways
- Providing tax agent or BAS services for a fee without registration strikes at the core of the statutory regulatory regime.
- Prior penalties for similar contraventions may justify a substantially higher penalty for repeat offending.
- A respondent’s failure to participate or provide financial evidence does not prevent the Court imposing a deterrent penalty.
Why It Matters
The decision illustrates the Federal Court’s willingness to impose materially higher civil penalties where an unregistered provider repeats tax-services misconduct after earlier enforcement action. A penalty need not be calibrated to a respondent’s means where no evidence of those means is provided and effective deterrence requires a significant sanction.